Contango Reviews U.S. Production Operations
Repairs are underway on Contango Oil & Gas' recently ruptured 20" pipeline that runs from our production platform at EI-11 to EI-63. The Company estimates the total cost to repair the pipeline will be approximately $2 million (8/8ths) which it believes will be covered by its insurance policies subject to a deductible of $0.5 million (8/8ths) and the work is expected to be completed by the end of March 2010. The Company has an approximate 53% ownership interest in the pipeline.
The Company's onshore drilling program with its joint venture partner, Patara Oil & Gas LLC, is currently producing at a rate of approximately 2.1 Mmcfed, net to Contango, from three wells. Our fourth well has been spudded and we plan to fracture stimulate the well this month. We are drilling ahead on our fifth and sixth wells. To date we have invested approximately $7.5 million in this drilling program.
Our offshore production is approximately 33 Mmcfed, net to Contango and we expect it will increase back to approximately 75 to 80 Mmcfed upon repairs to our pipeline. As of March 1, 2010, we had no debt, approximately $80.0 million in net cash and cash equivalents and $50 million of unused borrowing capacity.
- Contango, Crimson Exploration Pen Merger Agreement (Apr 30)
- Contango Mourns Loss of Founder (Apr 22)
- Contango Spotlights Year-End Results (Aug 29)